Why railways’ Dedicated Freight Corridor was delayed, and how it could be a game-changer

As the total 2,843-km project is finally set to take off, here’s why it is significant for the railways and for goods movement in the country.

The inauguration of the 306-km New Rewari-New Madar section of the Western Dedicated Freight Corridor at the New Kishangarh station near Ajmer on 7 January. | Representational photo: ANI

New Delhi: Prime Minister Narendra Modi Thursday inaugurated a 306-km section of the Dedicated Freight Corridor (DFC) in the Western arm between Rewari and Madar, weeks after he launched the 351-km section in the Eastern arm between Khurja and Bhaupur in Uttar Pradesh for commercial operations.

The largest infrastructure of the Railways in independent India, the DFC is an ambitious project approved back in 2006, with the aim of decongesting the railway network by laying special tracks made exclusively for goods trains.

The project, which was facing several roadblocks over land acquisition and loan approvals for over a decade, will triple the movement of goods (from approximately 25 kmph to 65-70 kmph), double the railways’ freight capacity (from 5,400 to 13,000 tonnes), and also double the length of the trains being used currently to up to 1,300 metres from the current 700 m, according to railways ministry officials.

At the same time, the DFC would reduce the high logistics cost in India, which averages from 13-15 per cent of the product cost as compared to the global average of 6 per cent.

As the total 2,843-km project is finally set to take off, here’s a look at why it was languishing for years, its significance for the railways, and for goods movement in the country.

Slow pace

The DFC was approved under the United Progressive Alliance (UPA)-I in 2006, but the first major civil contract for track construction for a stretch on the DFC was awarded only in 2013.

While inaugurating the Khurja-Bhaupur stretch of the Eastern DFC, Prime Minister Modi, said, “This project is a living proof of the work culture of the government which was before 2014. In 2006, this project was approved. After that it remained only in papers and files. The seriousness that the Centre should have negotiated with the states, the urgency that should have been communicated, was not done.

“As a result, the work got stuck, hanged, went astray. The situation was that till 2014, not even a kilometre of track could be laid. The money which was also approved for this could not be spent properly,” he said.

This delay was primarily on account of two reasons. First, since the DFC passes through eight states, land acquisition remained slow and difficult, with state governments often not being very forthcoming.

However, a senior official of the Dedicated Freight Corridor Corporation of India (DFFCI), the nodal body for the DFC, said 88 per cent of the land for the project had been acquired by 2014. Yet, the capital expenditure remained very low.

“If the capital expenditure utilisation between 2006 and 2014 was Rs 4,000 crore, since 2014, it has been Rs 45,000 crore. Money is being pumped into this project at a greater scale,” he said.

“Further, the monitoring has been very strict. These days, the minister holds review meetings every week on DFC. Our target is that we will complete the 2,800 km corridors by June 2022,” he added.

Second, a senior railways ministry official who didn’t wish to be named said loan approvals to fund the approximately Rs 87,600 crore project was also difficult. Eventually, after extensive negotiation, the World Bank gave a loan of around Rs 13,578 crore for the project, and the Japan International Cooperation Agency (JICA) agreed to provide a loan worth Rs 37,960 crore.

Moreover, there are other issues which are encountered at the level of states, the DFCCI official said.

“Right now, I can say that we are facing trouble in Maharashtra and West Bengal… For example, in Maharashtra, at the Jawaharlal Nehru Port where the Western Corridor ends, there are about 3,000-4,000 non-title holders who need to be given compensation. But since they are non-title holders, we cannot do much. It is an issue that the state government has to resolve,” the official said.

This is why the DFCs are being inaugurated in patches, the official added.

Why it is important

The Eastern Freight Corridor arm (1,839 km) starts from Ludhiana (Punjab) and passes through the states of Punjab, Haryana Uttar Pradesh, Bihar and Jharkhand, to terminate in Dankuni (West Bengal).

The Western Freight Corridor arm (about 1,500 km) starts from Dadri in Uttar Pradesh and goes to Jawaharlal Nehru Port in Mumbai, passing through UP, Haryana, Rajasthan, Gujarat and Maharashtra.

The project’s significance lies in the fact that once fully operational, 70 per cent of the goods trains will shift to the DFC, thereby freeing up the existing tracks entirely for passenger trains.

The Indian Railways carries the fourth highest tonnage of freight globally — at over 1,200 million tonnes — which includes coal, steel, petroleum products, iron ore, cement, fertilisers, foodgrains and containers.

While there has been a jump of over 700 million tonnes of freight in India in the last decade and a half, there has not been a corresponding increase in the loading capacity of the trains.

For example, while the Golden Quadrilateral corridor, which connects Delhi, Kolkata, Mumbai and Chennai carries 58 per cent of India’s freight, it accounts for just over 15 per cent of the total length of the Indian Railways network.

As a result, a large part of the freight movement in India takes place through road transport, which raises the logistics cost of goods. According to the draft National Logistics Policy, the reason for a higher than global average logistics cost in India is that 60 per cent of transportation activities are conducted via road.

While the railways has undertaken a series of measures to attract road traffic — last year, it decided to set up Business Development Units at all zonal and divisional levels to stay in touch with industries and advertise the willingness of Railways “to attract new streams of traffic” — the DFC remains the most crucial aspect of this endeavour.

Since these freight corridors will be exclusively meant for goods trains, they will have one station every 50 km as compared to the existing railways, which has one every 10 km. This would mean that the cost of manpower, maintenance and operation for the DFC will be much lower.

An expert in rail projects at infrastructure firm GMR said that once fully functional, the DFCs will carry the cargo carried by 1 lakh trucks in a single day, proving to be a game-changer. However, he pointed out that the trains will be able to run at their actual speed — envisioned at around 80 kmph — only once the project is complete.

“The DFCs have four lanes, but the trains will keep having to run from four tracks to double tracks till the time all the construction is complete,” he said. “So for trains to actually run at 80 kmph on the entire stretch, we have to wait till the whole project is complete.”